In the year to April 2, M&S made pre-tax profits of £780.6m compared with £640.6m in the previous 52 weeks. Revenues rose to £9.7bn from £9.5bn.

However, this compared more favourably with a 53-week reporting period for 2009/10. Pre-tax profits for this period were £694.6m.

Underlying profits, which include items such as property disposals and impairment charges, rose 12.9pc to £714.3m, beating analysts' predictions of £710m.

Mr Bolland, who joined from supermarket chain WM Morrison in May 2010, said: "Marks & Spencer had a good year, with sales and profits ahead of last year. We traded well in a challenging environment, growing our market share in both clothing and food. We did this by offering customers great quality and value, and more choice through innovation."

Carrying out his plan of "evolution not revolution", Mr Bolland increased M&S's share of the clothing market to 11.7pc, while its food sector increased to 3.9pc. The retailer plans to increase the latter's range from 7,000 to 8,000 lines.

The retailer also plans to "segment" its stores. "All stores have been grouped into clusters using several criteria including affluence and age. In the autumn we will begin to catalogue pilot stores according to one of these segments," M&S said.

With solid growth in key areas, M&S is turning its attention to emerging markets, with India and China top of its list. In the past year Mr Bolland has poached Jan Heere from Spanish fashion group Inditex to lead its push for business overseas. He also hired Laura Wade-Gery from supermarket group Tesco to head M&S's online business.

There are plans to open 10 new stores in India over the next year, bringing the total in the country to 29. In China, M&S is looking to unveil a futher six stores in addition to the three opened in 2010/11.

"In November we set out our plan to grow M&S into a truly international, multi-channel retailer," added Mr Bolland. "We have made good early progress and are focused on both trading the business in the short term and on delivering against our long-term targets."

Mr Bolland is also looking to return to the French market, following the disastrous decision to pull out of the country in 2001.

A new flagship store will be unveiled in November on the Champs-Elysées in Paris.

Robert Swannell, chairman, said: "Marks & Spencer has a very clear plan and direction, and management is making good progress at all levels throughout the business."

Despite the retailer remaining cautious on future trading, as a result of austerity cuts and tighter consumer spending, analysts at Investec were more confident.

"Customers have proved to be less price resistant than feared and have bought into fashion stories, which is good for average selling prices," Investec said. "We continue to believe that the scope for self-help at M&S will allow it to out-perform its peers over a period when we see continuing pressure on sector earnings."

M&S announced a final dividend of 10.8p, a rise of 13.7pc on the previous year, taking the full-year payout to 17p.

The retailer's shares fell 5.5 - or 1.4pc - to 391.5p in early trading on Tuesday.